U.S. legacy automaker General Motors GM has been making significant strides in strengthening its supply chain to support electric vehicle (EV) production. A couple of days back, it inked a deal with a Norway-based synthetic graphite manufacturer, Vianode, to boost its battery supply chain.

General Motors’ efforts to secure raw materials, form strategic alliances and bolster manufacturing capabilities are part of a broader strategy to lead the transition to sustainable transportation. But does this make GM’s stock a compelling buy right now? Let’s dive in.

GM’s Strategic Alliances to Rev Up EV Game

In an era where supply chain disruptions can derail production plans, the U.S. auto giant is doubling down on building resilience. The COVID-19 pandemic has taught the importance of strong and diverse supplier relationships, and GM seems to have embraced these lessons. By prioritizing long-term partnerships, nearshoring efforts and direct collaborations with suppliers, the automaker has positioned itself to navigate market complexities with greater ease.

A recent example is GM’s multi-billion-dollar deal with Vianode, which ensures a steady supply of anode materials for GM’s battery cells, produced in collaboration with LG Energy Solution. Slated to begin in 2027, the deal emphasizes GM’s commitment to a localized and sustainable battery supply chain in North America, aligning with its long-term electrification goals.

GM’s joint venture with Lithium Americas LAC to develop the Thacker Pass lithium project underscores the automaker’s focus on securing critical raw materials. With one of the largest lithium reserves in the United States, this venture (closed last month) represents a strategic investment to meet growing EV demand. With GM’s $625 million investment, it has gained a 38% stake in the project.

Multi-year agreements with LG Chemical, POSCO Chemical and Livent ensure a steady supply of lithium, nickel, cobalt, and cathode active materials — all crucial for battery production. The automaker’s long-standing collaboration with LG Energy Solution has evolved to include prismatic cell technology, enhancing battery performance and diversity. Their JV has established significant battery manufacturing capacity in Ohio and Tennessee.

GM has also expanded charging access for its customers by integrating Tesla’s TSLA Supercharger network and collaborating with EVgo EVGO to deploy fast-charging stations across metropolitan areas. These initiatives enhance the EV ownership experience and support the company’s vision of an all-electric future.

GM’s Dominance in the U.S. Market

It is the top-selling automaker in the United States, with a compelling portfolio and a strong demand for its quality pickups and SUVs. GM sold 2.7 million vehicles in 2024, a 4.3% increase year over year, with all four key brands — Chevrolet, GMC, Buick, and Cadillac — posting solid gains.

With regard to EV sales, GM secured the second spot in U.S. BEV sales in 2024, just behind Tesla, which continues to dominate with a 50% market share. General Motors’ EV sales totaled 114,000 in 2024, representing a 50% increase from 2023. The company’s diverse lineup, including the Chevy Equinox EV, Cadillac Lyriq and GMC Hummer EV, positioned it as the second-largest EV seller in the country.

Beyond EVs: GM’s Cost Discipline and Financial Strength

General Motors’ focus on cost management and financial resilience also augurs well. The company’s $2 billion cost-reduction program is expected to have been completed by 2024 end.

GM’s balance sheet further underscores its strength. With $40.2 billion in total automotive liquidity as of Sept. 30, 2024—including $23.7 billion in cash—the company is well-equipped to weather macroeconomic challenges.

Investor-friendly initiatives add another layer of appeal. GM’s share buyback program, which included $1 billion in repurchases last quarter, reflects management’s confidence. Its plans to retire an additional 25 million shares by year-end further demonstrate its commitment to enhancing shareholder value.

Stock Performance & Valuation

GM’s stock has surged 50% over the past year, outperforming its peer group and the broader market.

1 Year Price Performance

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The stock is trading above its 200-day moving average, indicating bullishness.

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From a valuation standpoint, GM fares well. Trading at a forward price-to-earnings ratio of just 4.82, well below its peer group, GM offers significant upside potential for value investors.The stock has a Value Score of A.

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GM: A Strong Buy

General Motors’ robust U.S. market presence, cost management and a clear commitment to electrification position it for sustained success. The company’s efforts to fortify its supply chain and expand its EV portfolio bode well. The Zacks Consensus Estimate for GM’s 2025 EPS implies year-over-year growth of 4%. The estimate has been revised upward by 14 cents in the past 60 days, signaling optimism.

All in all, GM stock offers a blend of value, growth potential and resilience. As the automaker continues to rev up its EV game, now might be an opportune time to take the wheel and consider adding GM to your portfolio.

GM stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank  stocks here.

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